by Mary Beth Marklein, USATODAY

by Mary Beth Marklein, USATODAY

A for-profit college in Richmond, Va., has agreed to pay $5 million in a class-action settlement filed by eight former students who said the training they received was a sham.

The agreement, approved late Thursday in the U.S. District Court for the Eastern District of Virginia, settles claims that Chester Career College, formerly known as Richmond School of Health and Technology, targeted minorities for enrollment and did not provide them an adequate education. The complaint, filed in 2011, also estimated that the college has received approximately $5 million a year in federal student loan programs.

"In other words, the federal government funded (the school's) scheme," says John Relman, of Relman, Dane & Colfax, a Washington, DC, law firm that represented the plaintiffs. Relman says more than 4,000 former students may be eligible to receive funds from the settlement.

In resolving the lawsuit, the School did not admit any wrongdoing.

A statement put out by the plaintiff's attorneys says that "in addition to $5 million in monetary relief, the settlement provides for continued reporting by the School regarding its students' success and career placement. These measures will improve and strengthen the School as it continues its mission of educating, graduating and assisting in the employment of hundreds of students in various medical fields in and around Richmond."

A website for the college provides program information for several health-related fields, including nursing, radiology and medical billing. Officials at the Richmond school's headquarters did not return calls Friday. When the lawsuit was filed, the owner, Margaret Knight, told a local NBC affiliate that the allegations are "unfounded" and "offensive."

The complaint described a pattern of behavior in which the college advertised on the BET (Black Entertainment Television) channel and other programming that reaches predominantly African-American audiences, encourages students to take out federal loans, and then fails to provide adequate training.

Sade Battle, one of the eight lead plaintiffs, said she was talked into joining a program for community home health care workers, but was never taught basic skills such as how to change catheters and make beds. She eventually withdrew from the program and says she later defaulted on her loans. The court awarded her $10,000 plus reimbursement of more than $16,000 to cover loans and other expenses.

"It's kind of like a relief that everything is over with," says Battle, who now runs a residential and commercial cleaning business.

In court records, former employees said the school engaged in "dishonest" and "fraudulent" practices. One instructor described practices such as "falsifying loan applications and changing grades to keep failing students in school."

A 2012 Senate investigation raised Committee found similar practices across the for-profit education industry, costing taxpayers more than $30 billion. For-profit colleges educate about 10% of college students and account for nearly half of student-loan defaults, that investigation found.

Relman said he hopes the case inspires more dissatisfied students to speak up.

"People are getting ripped off by proprietary schools, he said. "What this could mean is a lot of people are going to sit up and take notice and say, people are starting to hold these schools accountable."